This is the weekly Energy Sector financial summary.

The Weekly Energy Report attempt to see the big trends in the energy sectors1.

We are mainly interested in understanding the transition from an oil world to an energy world.

At the moment, the report is build around 122 companies. You can see their tickers, names, sectors and sub-sectors at the end of the report. We created chart for each of these companies. The whole bundle of charts available here.

Also, the focus is really on North-American Oil & Gas companies. We will address this shortcoming soon by adding more European and Asian energy companies to the mix as well as diversifying the industries to include uranium, electricity generations, renewable energies and industrials2.

We would love to hear from you. Are there typos, mistakes? Are graphs unclear? not useful? Should we add additional resources and analysis? Write us a mail

To read the last report, go here and to see the second to last one go here

What made the news ?

Oil and Gas

  • Iran import gasoline and gazoil while it exports its condensate oil. Iran also export loads of LPG (mostly to China). Kenya, Tanzania stopped buying in July, Iranian LPG. Shipowner are not going to Iran anymore.
  • Exxon Mobile to invest 500M pounds to its UK refinery. Moral of the story? An all electric car world is not yet for tomorrow in the mind of the Exxon bosses. It will be able to refine oil to Diesel with lower sulfur content (to respond to new regulations)
  • Oil barrel flirting with the $80 again. Main reasons: uncertainty around the Iranian cuts. South-Korea cut all its imports and Indian and China have started to reduce (although they said they will still buy from Iran despite the sanctions). 2. Shale boom to not go as boom as we thought. Slow growth there due to the usual pipeline constraints. 3. Stockpile of crude in the US has unexpectedly decreased. 4. Hurricane Florence hitting the East Coast (all motorists filling their tanks to flee). 5. Increase long positions from Hedge funds on WTI contracts.

Renewable Energies

  • California (5th world economy?) and Germany are 2 places who have bet heavily on clean energy. Huge investment on wind and solar. Recent report showed that they could have achieved 100% of their electiricity supply with clean energy if they were using nuclear…. I think the report has a weird way to understand “clean” in clean energy! They understand it as energy without carbon emission. We all now that one of the issues with nuclear is waste management.
  • Bigger even if Germany had used all its renewable energy investment into nuclear they would have been able to totally decarobonized their transport.
  • In its final state of the Union, JC Junker is pushing for even more reduction in carbon emission. Germany is against it (some countries are not yet able to reach the current target)
  • very interesting research showing that big solar and wind plant in the Sahara could increase local rain fall in the Sahel region.
  • An article on Saudi Solar (for once it is not OPEC related!). $200Bn deal with Softbank for the production of 200 GW. This is soooo huge! It is tight to the 2030 Saudi Vision. Quite a few are perplexed. That would be more energy that Saudi need. Are they going to export it?

Uranium

  • Some more personal thoughts on the Uranium market.
    • All the people in the uranium mining business agree that there will be (soon?) a shortage in the supply of uranium due to the cuts in production (think Kazakprom and Cameco’s mine closure) and the opening of new nuclear reactors (mainly in Asia),
    • The people with money (investment funds) are thinking … let’s see if there will be an increase in nuclear reactor. Yes Asia is adding new ones, but Europe is trying to close old ones (think Germany). Some planned ones are not going to happen (think South-Africa).
    • There is a decrease in price to generate renewable power … But yes it is not base-load.
    • Social pressure is still high to move away from nuclear (rightly or wrongly) due to its waste management issues… And yes, there are as many ethical issues in the mining of cobalt, nickel, and all the rare earth elements for the production of renewable materials (solar panels, battery, turbine, etc.)
    • It is extremely hard to bring in new reactor to production. The UK debacle with EDF is an example… think huge budget overrun and delays. These costs and time overrun makes nuclear power not the super cheap options it once was. This is what makes the money holders dubious of the shortage of supply. Yes theoretically there should be … they are taking a wait and see approach. Let me see these new reactors working before I invest more.
    • After writing all of this, I am reading news that the only nuclear reactor in construction in the US, in Jacksonville, is way over budget (9 B. planned and now estimated cost are at $27B) and have huge delays. Things are getting so messy that the whole is in court about some PPA dispute. Needless to say, the way this is handled can either break all future hopes of nuclear development in the US.
  • Now, Poutine has passed a bill to stop any export of Russian uranium to the US or other countries (kind of a retaliation for the US sanctions). So why he is not using that power? US are in an acute short supply of Uranium. They are not producing enough in the country.
    • Because we are on a tipping point in the uranium market, Poutine has to be very careful on how he deals with the uranium supply. If it becomes messy business, it will become an easier choice for countries to go on the alternative energy road, gas turbine, etc.

Utilities - Electricity Generations

Report higlights.

General Energy overview

List of ETF selected for the general overview.

Selected Energy related ETF
ticker Name
VDE Vanguard Energy ETF
IXC iShares Global Energy ETF
KOL VanEck Vectors Coal ETF
URA Global X Uranium ETF
UNG United States Natural Gas Fund LP
MLPX Global X MLP & Energy Infrastructure ETF
USO United States Oil Fund LP
SPY SPDR S&P500

Returns of the energy ETF over the last 3 months

Returns of the energy ETF over the last 12 months

The Oil & Gas Industry

Following GISC, the Oil & Gas (OG) industry consists of the following sectors and sub-sectors:

List of Sectors and Sub-sectors of the O&G Industry
Sector Subsector Number of stocks
Equipment & Services Drilling 6
Equipment & Services Equipment & Services Cies 18
Consumable Fuels Exploration & Production Cies 31
Consumable Fuels Major Integrated Cies 11
Consumable Fuels Refining & Marketing Cies 11
Consumable Fuels Storage & Transportation Cies 19

At the bottom of this file, there is the complete list of financial instruments with their sectors and sub-sectors on which the following analysis has been based on.

Breadth of the Oil & Gas Market

Usually, on shorter time frame, we use the 50 days Standard Moving Average (SMA) to see if a stock is in an uptrend. The graphs below does exactly that: it checks the percentage of stocks that are trading above their 50 days SMA. This also tell us when the sector might be over-extended to the upside or to the downside.

Weekly and bi-monthly returns

In this section, we check the weekly return for the last 12 weeks for all stocks belonging to the industry, sectors and sub-sectors.

We do the same graph but with a 2 weeks return and a disaggregation by sub-sector.

Recap table

Now let’s have a recap table to drill in at the company level. This table has been generated with data from 17 September, 2018

Uranium

The list of financial instruments

Here is the list of all equities used in this report, their sector and sub-sector.

If you have enjoyed this report, let us now.

  1. The report has been generated with the R language and thanks to the many community members who have contributed their time in building packages.↩

  2. We use the AlphaVantage API to get our data.↩